North American carbon black manufacturers will keep on struggling to catch up with increasing demand for the product, and the growing demand is anticipated to remain in the nearest future, said an expert, Gary Horning, during the 34th Clemson University Global Tire Industry Conference last month.

According to an accounts manager from Sid Richardson Carbon and Energy, Gary Horning, who gave a speech during the conference, the product’s demand is expected to escalate, and tread carbon blacks will be completely sold out.

Gary Horning from Sid Richardson Carbon and Energy at the Clemson Tire Conference. Photo: Rubber News

He also quoted speech that Sed Richardson’s vice president for sales and marketing, Greg King, gave in 2014 – he had forecast that starting from 2016, the American market will witness a deficit of carbon black.

Horning concluded that his company’s prognosis had turned out to be credible, as the carbon black industry is struggling now.

King has made his new forecasts up until 2025 taking into account not only the United States, but Mexico and Canada as well, and providing analysis of what will happen if they stick to the North American Free Trade Agreement. Tire manufacturing is expected to escalate, and producers will start utilizing 65 percent of capacities as they will start constructing their first plants choosing the United States as a location.

According to the forecast, by 2025 the industry will face CB deficit of 375 million pounds. The experts believe that the balance on the market can be attained with the help of sound solution for resource supply.

Horning said that a resource deficit is unavoidable, and it can be solved if two of the options are used: importations of carbon black, or augmentation of NAFTA carbon black manufacturing.

In the United States, the carbon black commercial segment operates at an extremely high capacity.

The future of imported carbon black largely depends on oil prices. For instance, oil price of USD 100 per barrel enabled competitive imports of carbon black.

Given that the national tire production is undergoing transformations, carbon black manufactures are forced to deal with new obstacles.

Despite increased volumes of produced tires, shapes and forms of tires start to transform as well becoming wider and having smaller sidewalls. The transformed shape leads to increased demand for tread carbon black, however, according to Horning, carcass blacks start to lose its appeal to customers.

Image: Clemson University, Global Tire Industry Conference

In 2018, rim size of 18 inches is considered a best-seller, while it was once 14 and then 16 inches, claimed Horning.

He also noted that carbon black demand is influenced by popularity of silica and its application as a substitute for carbon black, as it provides less roller resistance. Nevertheless, this trend is favored by Sid Richrdson, as it is impossible to provide all consumers with sufficient amount of manufactured carbon black.

Reflecting upon other concerns, the carbon black commercial sector struggles to find rational solutions for transportation and logistics. To ship carbon black, railroad hopper vehicles, or hopper trucksare normally used.

Sid Richardson is the leading owner of hopper cars in North America; in 2016, it had more than 950 vehicles; this year, extra 50 cars are expected to be taken into operation, but the company claimed that they wished they could use even a thousand more – the obstacle here is that these cars are expensive and it will require a lot of time to get returns on investments.

Given that it can be problematic to manage logistic costs, and the expenses for new equipment will increase, transportation of carbon black will become a serious challenge, explained Horning.

Apart from these concerns, the US manufacturers will still need to pay certain environmental fees. Moreover, a recently signed contract with the U.S. Environmental Protection Agency forces Sid Richardson to comply with regulations, which target reduction of toxic emissions from plants. Thus, investments in production capacity can be more problematic in the nearest years.

Given the increasing carbon black demand, we see a good potential for tire pyrolysis companies focused on high-quality rCB production to expand their business and fill shortages of virgin carbon black on American market.

Article by Rubber News